WAWG
By Diana Carlen
WAWG Lobbyist
The Washington State Legislature convened for the 2017 regular session on Monday, Jan. 9. In odd calendar years, regular legislative sessions are scheduled for 105 days and are referred to as “long” sessions because the Legislature needs to adopt the state operating budget.
This is expected to be a very challenging budget year because the Legislature not only must enact an operating budget for 2017-2019 for the state, but also must adopt a plan to fully fund basic education (including revenue sources) by the time they adjourn to comply with an order of the Washington State Supreme Court. Estimates are that the Legislature must come up with as much as $3.5 billion over the next biennium for education funding, but there is no agreement on the actual amount.
Finding additional revenue is no simple task and is sure to dominate the discussions during the 2017 session. Disagreement on whether this requires new revenue (new taxes or raising existing taxes) or can be accomplished based on existing revenues is going to be contentious, especially with slim majorities in both chambers. The Senate remains controlled by the Republicans 25-24 while the House remains controlled by the Democrats 50-48.
In long sessions, the policy committees have more time to hear and debate proposed legislation. The first legislative deadline is Feb. 17, 2016, when all policy bills must make it out of their policy committee.
Senate Energy Committee Holds Work Session on Governor’s Proposed Carbon Tax Proposal
In December, Gov. Inslee released his proposed plan to fully fund basic education to comply with the Washington Supreme Court’s McCleary decision. Overall, the governor proposed $3.9 billion in new funding for K-12 schools. A major component of his funding plan is imposing a carbon tax.
Last Thursday, policy advisors from the Governor’s Office presented the carbon tax proposal to the Senate Energy committee. Emissions generated by transportation fuels and electrical generating units and through natural gas consumption would be taxed beginning at $25 a ton starting May 1, 2018. The rate of taxation increases annually by 3.5 percent, plus inflation. The tax is estimated to generate $1.9 billion in its first year and $2.0 billion in its second year.
The proposed tax would be levied on the first possession, meaning that it would be imposed on any company that generates or imports electricity, natural gas or petroleum. Electricity generated from TransAlta’s coal facility in Chehalis is exempt under the proposal.
The bulk of the revenue would go to education funding – $1.07 billion. The remaining revenue would be distributed as follows:
- About $250 million would be directed to clean energy and transportation programs.
- Another $250 million would go to water infrastructure and forests.
- About $200 million would go to competitiveness and job growth for companies through grants so that they could retrofit and upgrade facilities to meet cleaner energy requirements without a hit to their own budgets.
- The remaining $100 million would be directed at tax relief for affected communities to help lower income folks.
Reactions from Senate committee members was mixed with Senate Republicans questioning the impacts the carbon tax would have on rural areas and businesses. The chair, Sen. Doug Ericksen (R-Ferndale), asked how much the carbon tax would raise gas prices and the governor’s staff responded it would add about 24 cents a gallon at the gas pump. Senate Democrats on the committee were more receptive to the proposal, including Sen. Kevin Ranker (D-Orcas Island), also the Senate Democrats’ budget lead, who stated that the proposal was a triple win for the state that could result in cleaner communities, education funding and a boost to jobs.